China is likely to wheel out preferential financial policies to support rental housing development in the first half of the year, the central bank said. Photo: VCG

A total of 51 state-owned rental-housing firms have been created in the 12 cities in which China has pilot programs to boost the growth of the sector, the housing minister said Monday.

Wang Menghui, head of the Ministry of Housing and Urban-Rural Development, also told state broadcaster China Central Television that by 2020, 30% of the new land supply will be used for rental and shared-ownership housing — in which the tenants and the government both have a stake in a property.

Last year, the Chinese government enrolled the 12 cities, all of which have migrants flocking to them for work, in pilot programs to boost the development of the rental housing sector amid sky-high home prices that have kept many working-class people from becoming homeowners. First-tier cities Guangzhou and Shenzhen, and key second-tier cities such as Nanjing and Hangzhou, are among the 12 cities that were ordered to draft policies to support the sector.

Some of these cities have formed government-owned firms specializing in rental housing that aim to get a slice of this prospective 4-trillion-yuan ($631 billion) market, the state-run Shanghai Securities Times reported.

Tech giants and property developers are also seeking a role in the rental market by using their respective strengths in data and real estate expertise.

Ouyang Jie, senior executive at real estate firm Future Land Holdings, was quoted as saying the state-owned rental firms may act as government proxies for the management of plots designated for rental housing and the acquisition and renovation of existing homes.

Meanwhile, Pan Gongsheng, central bank deputy governor, said the country is likely to wheel out preferential financial policies to support rental housing development in the first half of the year. The policies being drafted are likely to help rental housing firms raise money from the general public via real estate investment trusts.

China will also accelerate the development of shared-ownership housing to diversify the supply in the market, Housing Minister Wang said Monday on the sidelines of the ongoing session of China’s top legislature.

The country will tilt its housing policy toward groups that can’t afford to buy a property but are indispensable for urban public services, such as urban sanitation workers, young teachers and doctors, Wang added.

China aims to build up to 5.8 million subsidized homes this year to replace outdated housing, Wang said. That number is a third of the 15 million subsidized homes China plans to build over the next three years.

Wang also said the government will continue to implement policies that aim to curb house price growth, which have played a major role in stabilizing the market since March 2017. In February, new-home prices in the four first-tier cities edged down 0.1% year-on-year in February, while growth in existing home prices slowed for the 17th straight month, the National Bureau of Statistics said Monday.